UNIT-II

ELEMENTS OF CRM
It Helps You Manage, Automate, and Optimize Customer Data

A good CRM system takes into account all touchpoints in the customer lifecycle. This might
include phone calls, messages through social media, website interactions, and emails. It
gathers data when a client Tweets about your company, files a complaint, submits a review,
or raises an issue. By analyzing this data, you can build a picture of who your target customer
is, how they typically behave, what they want and expect from your business, and how you
can win them over.
A CRM system can also help you organize, streamline and automate your processes so that
you collect the right data and have the right information at your fingertips whenever you need
it.
It Helps You Learn About Your Customers and Build Relationships

For a company to succeed in business, it needs to understand its customers. The data you
collect through your CRM solution can help you understand what makes your customers tick,
and how you can keep them happy. You can then use this information to communicate in a
way that addresses their needs and wants. This will create an increased sense of trust and
loyalty and help to cement a long-lasting relationship with all of your customers.

It Helps You Identify and Categorize Leads

Customer relationship management data can be used to optimize marketing campaigns using
a data-driven approach. This can help you better understand your sales pipelines and provide
you with a clear vision of all leads and opportunities so that you know which are worth
investing your time and attention in.

How Customer Relationship Management Benefits Your Business

Implementing a CRM system can provide your company with a great number of benefits.
Customer relationship management can help you get to know your customer base and build
better relationships. A CRM tool can be used to manage and analyze your customer data
more effectively and automate and optimize your customer relationship management
processes. It also makes it easier for your employees to identify sales opportunities and
manage marketing campaigns, driving the bottom line of your business.

Better Analytics = Better Relationships

Access to more comprehensive analytics will help you understand market trends and
customer wants and needs. Customer relationship management data can help you gain
valuable insight into your typical customer so that you can build a better customer experience
for them. When a customer sees that you care about the experience they have with your
company, it helps build a sense of trust and loyalty.

Better Relationships = Higher Customer Satisfaction

CRM data doesn’t just stop there. The better the relationship you have with a customer, the
more likely they are to have a positive experience with you and return. What’s more, a CRM
solution centralizes all your customer data so you can access what you need at the drop of a
hat. This makes it far easier for your customer service reps to address any issues that crop up
so that all your customers walk away with smiles on their faces.

Higher Customer Satisfaction = Increased Retention, Loyalty, and Profit

 Of course, the bottom line is that happy customers mean increased retention, loyalty, and
profit. The better the experience a customer has with you - whether it’s their first visit or they
are a long-time customer - the more likely they are to come back. You are only as good as
your last transaction with someone, so you need to keep your customers satisfied to keep
them coming back. This is what customer relationship management is all about. A good CRM
system can also help you keep in touch with past customers and incentivize them to visit you
again. After all, it is far cheaper, in the long run, to keep a customer than it is to find a new
one.

PROCESS OF CRM
What is the CRM process cycle?
To understand the steps in the CRM process, you have to understand the customer
lifecycle. It is one of the first concepts you learn as a sales rep to understand how a person
becomes a loyal customer.
The CRM cycle involves marketing, customer service and sales activities. It starts
with outreach and customer acquisition and ideally leads to customer loyalty.

There are five key stages in the CRM cycle:

1. Reaching a potential customer
2. Customer acquisition
3. Conversion
4. Customer retention
5. Customer loyalty

What are the 5 steps in the CRM process?

The five steps of the CRM process are a collaborative effort between marketing, sales
and support departments. To help you understand how each team works together, let's go
through how each step works in practice. We will cover not only how each part of the process
can be completed with a CRM tool but also who is responsible for each step.
1. Generate brand awareness
The first step to acquiring new customers is introducing them to your business. The
marketing team generally takes on this task using a number of measures:
o Learning about your target audience. Marketers will conduct research to
identify their audience’s target demographics, interests, preferred channels of
communication, which type of messaging they respond to most and what they
care about.
o Segmenting your target audience. Audience personas are created to segment
a brand’s target audience into similar groups based on similar interests or
demographics. This helps marketers identify which types of people are most
likely to become customers and who their campaigns should target.
o Creating marketing campaigns that speak to those target
demographics. A/B tests and marketing automation can identify what works
 and what does not, create unique campaigns for unique customer segments
such as on social media or email, and create strategies for lead acquisition.
When it comes to completing these steps, CRM software contains a wealth of
information. The tool can show patterns in past leads and customers to give marketing teams
a clear picture of their target audience. Beyond understanding similarities in demographics,
marketers can also analyse sales notes in their CRM to understand what led to conversions in
the past. By understanding what resonated with leads, marketers are better equipped to create
effective campaigns.
2. Acquire leads
Introducing your brand to a potential customer is just the beginning of the CRM
process. From there, you have to encourage them to learn more about your business and
engage with it.
Depending on how your company is structured, this lead-acquisition step could be a
marketing or sales team responsibility – or both. Your marketing team, for example, might
encourage website visitors to share their email with a newsletter sign-up CTA or a giveaway.
On the other hand, the sales team could use their CRM system to set up a live chat on your
site. With this feature, your team can proactively contact potential customers who land on
your website.
If your CRM technology comes equipped with a lead enrichment tool like Reach, lead
acquisition is unbelievably simple. All the tool needs is a lead’s email address to instantly
reveal detailed information about the person. With customer data, you can personalise your
outreach with the lead to start the relationship off on the right note. Not to mention that you
can save a lot of time by not having to research leads yourself.
3. Convert leads into customers
You have successfully engaged with your leads, and they are interested. Now it is
time to turn those leads into customers.
To do so, sales reps must first be skilled at identifying how interested leads are and,
specifically, whether they are interested enough to make a purchase. A CRM system is very
helpful here. The historical data from past successful sales can be used to identify lead-
qualification criteria. These criteria can be added as ‘attributes’ to your CRM’s lead-scoring
tool to help reps identify opportunities with the highest probability of a sale.
If leads do seem likely to make a purchase, reps must then be able to nurture them
further and build their trust enough to convert. One way to do this is for reps to send leads
case studies, white papers and other resources that may sway their decision.* *
Reps should also use their CRM to set reminders and tasks to follow up with interested leads.
After all, studies have shown that "63 per cent of consumers need to hear a company's claim
3-5 times before they actually believe it." Use your CRM’s dashboard to help you remember
to follow up to ensure that no opportunities are missed.
4. Provide superior customer service
You have successfully converted your lead into a customer. Great! But the CRM
process does not end when a customer converts. In order to grow as a company, you need to
retain customers. How do you keep the customer coming back? Excellent service from
support.
According to Zendesk’s 2020 Customer Experience Trends Report, customer service
is the biggest factor that determines a consumer’s loyalty to a brand. Conversely, poor
customer service can cost you customers and have a negative impact on your reputation.
Support teams must be able to deliver superior support whenever, wherever and however
their customers expect it.
Forty-nine per cent of customers say being able to resolve their issue quickly is the most
important aspect of a good customer service experience. With CRM software, support agents
can easily access the historical customer information they need to resolve a ticket quickly.
57 per cent of customers expect to have a choice of channels when reaching out to customer
support. CRM features allow support agents to not only provide omnichannel support but also
manage those conversations in a single, unified view.
With the right CRM, your agents have the customer information and resources they
need to resolve a customer’s issues quickly and effortlessly. This allows for a stress-free and
efficient experience for both the customer and the support agent.
5. Drive upsells
 When we think of a returning customer, we imagine a shopper continually coming
back to the same business to buy the products they know and love. But there is another key
way in which existing customers provide value – by upgrading to the most expensive
products.
How do you convince customers to switch products? Personalised recommendations
via email are a good place to start. You can use your CRM to organise customers into smart
lists based on similar purchase histories. You can then create custom email templates that
send relevant product releases to entire lists of customers at once. In this way, you can be
sure that the promotional deals or releases you send are reaching the people most likely to
buy them.
If your business is service-based, you may find upsell opportunities through check-in
calls. Set reminders in your CRM to regularly reach out to repeat customers to ask how they
are doing and whether there is any way you could improve your service. Their needs may
very well have changed since the last time you spoke, and they may be ready for an upsell.
With a CRM process, the customer life cycle no longer feels abstract. The right CRM
enables you to create a deliberate, personalised experience that naturally drives leads through
your sales pipeline.

CUSTOMER ACQUISITION:
Customer acquisition is the process of getting potential customers to buy your products.
A strong customer acquisition strategy: 1) attracts leads, 2) nurtures them until they become sales-
ready, and 3) converts them into customers. The overall cost of these steps is referred to as your
customer acquisition cost (CAC).
STRATEGIES FOR CUSTOMER ACQUISITION IN BANKS:
Referrals from Current Customers
Getting referrals from an existing profitable customer is another good way to reach
out similar profile people. Word-of-mouth promotion, whether positive or negative, is widely
recognized as a major factor in marketing banks products. Banks would like to target referrals
from their existing profitable customers and an example of this can be targeting a referral
campaign for set of customers who have been consistently profitable and come from a similar
background with interests in game of golf. Referrals from these customers will most likely be
from the similar segment. This can also be supplemented by sponsoring certain golf events
and building awareness of the brand.
Needs-Based Marketing
During the targeted marketing care to be taken to see that the right product/pricing
strategy is adopted. Products from different banks look almost similar and it is important to
see that the customer sees value in going for the bank’s product. Pricing may not be the only
differentiator as customers have their own likes and dislikes. Some of them will be keen on
having rewards, others airlines miles, some membership to golf clubs, some others accounts
which do not charge overdraft fees etc. So targeted marketing based on customer needs plays
a very critical role.
Multi-Channel Insight
Banks acquiring customers using multiple channels over a period of time would have
had a lot of data to see which one channel is performing better and then better it to see that
the desired results are achieved to boost their revenue and return. A proper acquisition
strategy should be in place to see whom to target and what product to target and how to target
the same is important.
Content marketing
Content marketing involves creating blog posts, guides, infographics, videos,
podcasts, and more to answer questions, solve problems, and introduce readers to your
business.
Content marketing is efficient, compelling, and persuasive for capturing website
traffic. Plus, it generates over three times as many leads as outbound marketing and costs
62% less, according to research from Demand Metric.
Search engine optimization (SEO)
 Search engine optimization is the process of tailoring your website content to boost
rankings on Google or other search engines.
SEO is one of the most important customer acquisition methods for online businesses,
and it’s likely your customers are using search engines to find information. That’s why it’s a
valuable channel for acquiring new customers.
Mobile marketing
Mobile marketing refers to reaching customers on their smartphones through SMS,
Facebook Messenger, push notifications, or mobile apps. Mobile sales are expected to reach
over 280 billion dollars in 2020, making up 45% of the total ecommerce market.
With mobile marketing, we can:
 Easily create automated omni-channel campaigns. With marketing automation
software like ManyChat, you can create integrated, cohesive shopping
experiences across your customer touch points, including email, text,
Facebook Messenger, and push notifications.
 Align with consumer market demand. Audiences today want to interact with
brands 24/7. An omni-channel presence can help deliver an informed,
consistent message across multiple channels.
 Personalize at every stage of the buyer journey. Mobile channels help you
more easily collect customer data to create more targeted outreach to cold
audiences.
Social media
For online businesses, having a presence on social channels like Facebook, Instagram,
TikTok, and Twitter matters. With an estimated 3.6 billion people on social media
worldwide, it’s easy to promote your business.
Benefits of getting on social media include:
 Increasing brand awareness by posting consistently.
 Showing customers a more creative side of your business.
 Engaging with your audience on social media to bring them back to your website.
 Promoting your products to followers.
Email marketing
Outside of direct sales, there is no better business outcome attached to first-time
visitors than when they subscribe to receive updates from you. You can send sales or
discounts for your products or services, exclusive content, customer features, and other
promotional campaigns.
When you want to communicate something with your customers, email marketing is
one of the most cost-effective ways to do so.
Some other reasons to use email marketing are:
 It’s easy to start. Email marketing platforms like MailChimp are easy to use and
intuitive. They come packed with features to help you get sign-ups, design emails,
collect data, segment customers, measure success, and more.
 To automate marketing tasks. Unlike paid marketing campaigns, you can set up an
automation to trigger a series of emails you can set and forget. From welcome series
to post-purchase follow-ups to rewarding customers with special promotions, you can
connect with thousands of customers quickly and easily.
 To increase brand awareness. Each time you send an email, your customer gets a
notification. Whether they decide to open your email or not, they see your brand and
offer, which can keep you top of mind the next time they want to buy something.
 It’s easy to measure performance. Email marketing platforms also make it easy to
collect data and use it to improve your marketing strategy moving forward. You can
track opens and clicks, ecommerce activity like purchases and abandoned cart
recoveries, and even how much traffic you send to your online store or website.
 If you have the means, hiring an expert in email marketing can pay off. But if you
don’t have the budget, you can still invest in client acquisition software with email
marketing features, which can expand your reach and increase your sales.
Referral program
Referral programs are an easy way to improve client acquisition in your business.
You’ve probably come across them before for professional services or online stores. The
programs are typically straightforward: The more people you refer, the more you save or
earn.
Paid advertising
If you’re a newer business or online store, chances are you’ll have to invest more in
paid advertising to acquire new customers.
Ads produce results immediately, generating traffic, leads, and sales right after you
launch.
However, pay-per-click (PPC) can get expensive fast without the right tactics. Some best
practices to follow to maximize ad spend are:
 Always include a remarketing strategy. Whether you run Facebook ads or Google ads,
not everyone who clicks through your ad will buy something. Support your paid
advertising with remarketing ads to (basically) follow shoppers around the internet
while showing your ads until they buy.
 Use Google Dynamic Search Ads. Dynamic Search Ad headlines and landing pages
pull content from your website based on what a person was shopping for. They help
keep your ads relevant, save you time, and increase conversions for your ads.
 Use automation for Facebook ads. If you choose to run Facebook ads, consider using
a chatbot to start a conversation with paid traffic. It’s an easy way to create interactive
experiences for potential customers and maximize your ad spend versus traditional
methods.

WHAT IS CUSTOMER RETENTION?

Customer retention is a metric that measures customer loyalty, or the ability for an
organization to keep its customers over time. In addition to identifying the number of loyal
customers, customer retention can reflect or predict customer satisfaction, repurchase
behaviour, customer engagement and emotional ties to a brand.

CUSTOMER RETENTION STRATEGIES

Some best practices and strategies to follow when considering customer retention
strategies include the following:
 Offer personalized service. Personalizing services to the customer can improve a
customer's experience and lead them to become repeat customers.
 Use data to provide personalized support interactions. Data gathered about
customers can help aid organizations in knowing their preferences, enabling them to
build more personalized services.
 Build trust. Building relationships with customers will help increase brand
loyalty and trust.
 Use social media. Social media sites such as Twitter, LinkedIn and Facebook can
help an organization reach out to its customers, build relationships and trust, and even
respond to customer support queries.
 Incentivize loyalty. This can be done through customer loyalty programs or by
offering discounts or credit.
 Gather customer feedback. Gathering feedback from customers enables an
organization to further personalize experiences.
 Improve customer support services. Implementing a live chat or help desk tool,
putting an emphasis on responding to customer support queries quickly and
encouraging customers to create accounts can all help increase customer retention.
All these customer retention strategies together can help build more trust
between an organization and a customer, which can help increase the chances of
current customers becoming repeat customers.

MODELS OF CRM:
There are several different strategies or models for customer relationship management. We’ll
cover four of the most common CRM models briefly below.
 IDI
C Model (Click on image to modify online)

IDIC model
The IDIC model was developed by the Peppers and Rogers Group as a generic
blueprint for implementing CRM in a variety of situations. IDIC stands for the four stages of
CRM implementation: identify, differentiate, interact, and customize.
 Identify
The first step is to identify your customers, which businesses can accomplish by
collecting information like the customer’s name, address, and purchase history at each point
of contact across the company.
The goal is to collect as much information or data as you can on each customer in
order to better understand their needs, wants, and purchase behaviors.
 Differentiate
The next step is to differentiate or segment your customers based on their current and
projected lifetime value. Remember: Not all customers will have the same value to the
business.
By differentiating your customers based on their value to the company, you can
prioritize your customer relationship efforts on the most valuable clients and tailor your
interactions to best fit each segment for optimal profitability.
 Interact
The third stage is where you get to apply your CRM plans for interacting with your
customers. Once your customers are analyzed and categorized, you can develop customized
interactions—for example, for valued customers, you might offer loyalty benefits or rewards
to encourage retention and continued spending.
Keep in mind, you should be learning from each interaction to continually improve
future interactions.
 Customize
After you have documented your customer interactions, you can then analyze them to
develop more customized one-to-one service. The goal is to ensure that your customers’
needs and expectations are met and that you have pinpointed them individually (or very
narrowly).
 QCI Model
(Click on image to modify online)

QCI model
Described as a customer management model rather than a customer relationship
model, the Quality Competitive Index model focuses on three main activities: acquisition,
retention, and penetration.
The QCI model starts with the customer’s external environment at the top—their pain
points, business goals, and other factors will affect whether they are ready to buy or interact
with your sales team, which in turn impacts the customer experience. The customer
experience then affects customer proposition (what you offer the customer) and customer
management activities. As you can see from the magnified version of the inner circle, many
activities are involved to acquire and retain customers.
The QCI model also considers the people and technology involved with keeping this
whole system going. Although QCI has replaced the word “relationship” in CRM, this model
still starts and ends with people.

Payne’s Five Process model

The Five Process CRM model was developed by Adrian Payne and Pennie Frow. This
model emphasizes a cross-functional approach for effective CRM processes.
There are two main components to the model: cross-functional CRM processes and
key elements of CRM implementation.
Payne’s model outlines five processes:
o Strategy development
o Value creation
o Multichannel integration
o Information management
o Performance assessment
There are four key elements necessary for a successful CRM implementation:
o CRM readiness
o CRM change management
o CRM project management
o Employee management
When implementing a CRM strategy, companies should conduct a CRM readiness
assessment to determine how prepared they are to implement a new CRM process.
Additionally, because CRM involves a fundamental cultural and operational shift,
companies should invest in CRM change management and project management as the new
strategies are introduced and the complexities of the CRM initiatives grow.
Finally, employee buy-in is crucial for successful CRM. Make sure your employees
understand the strategies and processes and engage with the new customer-centric culture.
Without these underlying conditions and elements, the CRM processes cannot succeed.

CRM
Value Chain Model (Click on image to modify online)
CRM value chain
A value chain is a high-level model developed by Michael Porter that identifies the
processes a business uses to develop an end product or service for the customer. The goal of
the value chain model is to identify and prioritize the most valuable activities to the company
and improve processes to gain a competitive advantage.
The CRM value chain model applies this principle to customer relationships. This
CRM model observes all the stages and activities required to build a relationship with a
customer.
These activities are divided into two stages: primary and support.
o Primary stage
The primary stage of CRM has five main processes that enable the strategy.
Customer portfolio analysis: Similar to the IDIC model, the first step of the value
chain model is to analyze your customers to identify your SSCs (a.k.a. the customers who
create the most value for the company). This analysis stage helps companies understand their
customers so they can better address their needs and expectations and develop strategies to
maximize their lifetime value.
Customer intimacy: The next step is to engage with the customer and build on the
original database of information. At each touchpoint, companies should be collecting data on
the interaction in order to better understand and serve their customer. The better you know
your customer (and adjust your service accordingly), the more likely you are to retain their
business over the long term.
Network development: A business’s network includes all people and entities involved
in the value chain, including partners, suppliers, customer service, investors, etc. The goal is
to use your customer data to inform the processes at each level of your network so that the
entire system works together to optimize your customer’s experience.
Value proposition development: Armed with your customer information and
interaction data, you can create value for your target customers. The idea is to shift the focus
from the product to your service and to reduce process costs to create more value for the
customer.
Relationship management: The last stage of the value chain model is to manage your
customer lifecycle. This process involves evaluating your business processes and
organizational structure to manage acquisition, retention, and customer development.
o Support stage
There are five supporting conditions necessary in order to effectively implement the strategic
processes of the primary stage:
 Leadership and culture
 Procurement processes
  HR management processes
 IT/data management processes
 Organization design
 Creating and developing these underlying conditions will support a successful CRM
value chain implementation.

What is a CRM Roadmap?

A CRM roadmap is a plan for CRM implementation that aligns an organization’s
business strategy with the functionality of its CRM. To define a CRM roadmap, an organization
must understand its processes, how each department works to meet the needs of customers, and the
positive outcomes it hopes to see in their processes through the introduction of CRM.

Why Are CRM Roadmaps Important?

Whether you are investing in desktop software, a web app, a mobile app, or SaaS,
CRM solutions are a financial investment. Without a CRM roadmap, you will blindly implement
a CRM system and hope that it meets the needs of your business. On the other hand, if you choose
a CRM solution that does not fit your business’s short and long-term objectives or reflect its
priorities, you will have wasted valuable time and financial resources.
It is unwise to invest in technology without understanding if it has the features and
functions that are important to your business. For example, you wouldn’t purchase a car without
ensuring that it had at least some of your wanted features.
Like cars, thousands of different CRM solutions are available on the market. So how
do you ensure that you choose a CRM solution suited for your present and future needs? By
developing a CRM roadmap. Without a CRM roadmap, your implementation project is bound to
fail.
A CRM roadmap is the foundation upon which an implementation can be successfully
carried out, ensuring that functionality and future enhancements are planned strategically and
logically. With a strategic CRM roadmap, your business can maximize its ROI for CRM.

A Basic CRM Roadmap

If you are ready to begin a CRM implementation project, these are the basic steps your
organization should follow to guarantee successful CRM implementation:
 Identify issues
 List required features and functions
 Create budget
 Find an implementation partner
 Setup and data migration
 Testing and training
 Evaluate
Identify Issues
CRM solutions are powerful tools used to manage relationships with prospects, customers,
and other contacts. If you are thinking about CRM implementation, it is likely because your
sales team or other departments have run into issues. So the first step is to identify what
issues your business is experiencing.
Listen to feedback from your teams to accurately identify pain points that can be addressed
with CRM. It is vital to accurately identify the issues your teams face so that your business
can purchase and implement a CRM solution that will improve daily operations.
List Required Features and Functions
As previously mentioned, there are thousands of different CRM solutions available. To find
the best CRM solution for your business, you need to know which features and functions are
most important to address your identified issues. It is helpful to list which features and
functions are the most important and which ones are the least important if there are CRM
options that only have some of the features you are looking for.
Create Budget
Now that you have an idea of what issues your business needs to address and which features
are best suited to accomplishing this, you need to create a budget. Creating a budget will help
your business prioritize CRM solutions and choose the best option for your requirements. A
budget will also help your business communicate your needs and requirements to an
implementation partner.
Find An Implementation Partner
An implementation partner will make the technical aspects of CRM
implementation easy. Setting up the proper tools, building the architecture, and migrating
data are all tasks that are likely too technical for your business to handle on its own. Simplify
the CRM implementation process and find a partner that can help you through the entire
process.
Setup and Data Migration
Setting up the proper tools and migrating your existing customer data into your new CRM is
the most technically challenging portion of CRM implementation. Therefore, it is highly
recommended that you work with an implementation partner to accomplish these technical
tasks. Improperly implemented CRM will not support your business processes, and it will be
a waste of time and money.
Testing and Training
Once your new CRM has been implemented, it is time for you to test it and train your
employees on using it. Once again, your CRM implementation partner should help your
business test your CRM and train your employees. In addition, it is important to give your
implementation partner feedback during this phase of the CRM implementation process to
make the necessary adjustments. Finally, after everything has been thoroughly tested and
your employees trained, you are ready to go live with your new CRM.
Evaluate
After your CRM is deployed, it is important to continuously evaluate your CRM to ensure it
is living up to expectations. How have the results lived up to your expectations? Adjustments
might need to be made over time which is why regular evaluations are important to the long-
term success of your CRM solution.